HP led the PC segment in 2020, but supply remains a challenge
As India Inc worked from home for a significant part of 2020, consumer sales of personal computers saw a 74.1% y-o-y growth, according to IDC. Until 2019, enterprise sales contributed the majority chunk of sales in this category. However, in 2020, the share of consumer sales increased to 50%, from 37% in 2019. HP led the market with a 28.7% share in CY20, and shipped more than 2.94 million PCs in India.
“The new use cases of WFH and schooling from home have definitely increased the relevance of PCs and printers in the consumer segment,” says Gurpreet Brar, head, channel sales and distribution, HP India.
HP recorded an 8.8% y-o-y growth in Q3 FY21 in the PC segment. The company’s shipments grew 47.3% in this quarter in 2020, as compared to the same period of 2019. In the printer category, HP had a share of 40.2% in Q3 FY21; its shipments grew 22.1% y-o-y. But with increased competition, can HP maintain its leadership position in 2021?
Catering to demand
HP introduced products targeted at professionals working from home and students in 2020. For instance, the HP14s priced at Rs 44,999 is a laptop that comes with in-built 4G capability. The product caters to consumers who have no or limited broadband connectivity. It also launched the HP Smart Tank printer, designed for small and medium businesses, professionals and home-office needs.
The printers segment benefitted from the rise in PC sales. “The bulk of the demand for printers was for home printing. Therefore, ink cartridge printers, ideal for low load of professional use, saw the maximum growth in 2020,” says Brar. The growth in the inkjet segment for HP was 51.7% y-o-y in Q3 FY21, the IDC report said.
Analysts say that printers with Wi-Fi and Bluetooth connectivity, and multi-purpose printers are the ones in high demand now. As a result, “the average selling price of the printers sold by HP has increased in 2020,” informs Brar.
HP added 50 new HP World stores in 2020, taking the total number of its exclusive brand outlets to 585. Brar says the company has seen a 10-15% increase in e-commerce sales compared to the pre-Covid period. “About 30-35% of our sales happened online last year,” he adds.
HP is riding on the expectation that a hybrid work model could further fuel the growth of PCs in India. “The PC category has a penetration of 11-12%, whereas for printers this number is still in the low single digits,” says Brar.
However, addressing the rising demand for PCs, printers and accessories could prove to be challenging for manufacturers. “Several manufacturers, including HP, have not been able to meet the demand for products because of supply challenges,” says Jaipal Singh, associate research manager, IDC.
This has particularly impacted enterprise sales, analysts say. In 2020, sales of desktops declined 33.2% as companies reduced their spending on fixed computing devices and preferred mobile devices, such as laptops and notebooks, to manage their operations remotely.
Supply constraints impacted HP’s performance in Q3 FY21, restricting its growth in the commercial segment. Dell, a close competitor, became the leader in the commercial segment in that quarter. Epson, HP’s competitor in the printer market, benefitted from resolving its supply issues in Q3 FY21, and became the leader in the inkjet segment with a share of 41.1%.
Thus far, discounts and offers have been the name of the game. Faisal Kawoosa, founder and chief analyst, techARC, says manufacturers decided to discount products before the shortage crisis became severe. “It will be difficult to continue with this if the component shortage continues,” he says.